Tesco Planning More Range Simplification, Supported By New Clubcard-Driven Platform For Brands
Tesco has unveiled its new ‘Media and Insights’ platform that aims to provide suppliers and advertising agencies access to the wealth of customer data it collects through its Clubcard and in-store activities. The move will also support plans for another round of range simplification at the supermarket group to ensure its offer meets the latest consumer needs.
The closed-loop platform is powered by Tesco’s customer data science unit dunnhumby. It is designed to provide brands with proper insight to drive more “interactive, two-way relationships with customers” and help them create “stronger connections” to enhance loyalty for both suppliers and Tesco.
Using data from its 20 million-plus Clubcard holders and dunnhumby’s analytical expertise, Tesco’s sees the Media and Insight platform as a way to share actionable, bespoke insight with brands to improve engagement and develop more effective propositions.
Tesco highlighted the Media opportunities, with its weekly reach rivalling some of the biggest online platforms. The supermarket’s new platform will offer five targeting/advertising options for brands, from one-to-one personalisation through to broader mass reach campaigns.
The group stated that its closed-loop measurement tools would allow brands to see the true return on spend, with a claimed average ROAS of £6.60 with Tesco Media, compared to an average of £3.80 on other channels.
Meanwhile, three products across Insight will give brands access to “relevant and comprehensive insights” that can be used for new product development, packaging, ranging, and campaign effectiveness. Tesco stated that this would help its partner brands to “innovate at speed” and lead to better products on its shelves.
Speaking at a supplier event this week, Tesco’s Chief Executive Ken Murphy said the “live feedback” from Clubcard holders would enable suppliers to drop products earlier if they do not go down well with customers. However, it will also enable them to invest more and provide extra marketing support when products prove popular.
According to trade magazine The Grocer, Tesco told suppliers that it was planning a new range ‘Reset’ to simplify the business, following a series of reviews under previous CEO Dave Lewis. The new reviews will make greater use of personalised data from the new dunnhumby-driven platform.
“Data and customer insight are central to our success and we are looking to have a much closer relationship with Dunnhumby,” Murphy told suppliers.
“Our ambition is to work with you at a much earlier stage of your innovation cycles so you can make decisions on whether to kill off or move on with a project.
“We think by working really closely together we can reduce the time to market, we can reduce the cost to market, and we can reduce the number of products that go to market and ultimately fail.”
Meanwhile, speaking to Marketing Week, Tesco’s Chief Customer Officer Alessandra Bellini said the supermarket believed now is the right time to “reset” and look at a suite of new approaches, tools, methodologies and products to make sure the business is fit for the future.
“Externally, we’ve seen the increase in e-commerce, online engagement from customers, and the digitisation of the world. Our customers are there, and we’ve seen through the pandemic that we are able to serve them there,” she explained. “We want to ensure we provide a more relevant and personalised offer to meet our customers’ changing needs.”
Tesco also believes the platform is necessary for the grocer to deliver on one of its strategic priorities, which centres around the Tesco Clubcard. Bellini stated that the supermarket wants to have more personalised and engaging conversations with customers so they feel more “in control” of how they interact and engage with both Tesco and its supplier partners.
“We want customers to be slightly less passive. We want them to engage with Tesco and the more they do, the more they feel they want to… because they find something [products] that they really care about,” she added.
“This is an evolution of what Tesco and Dunnhumby have been doing for a long time. The Tesco Clubcard has been around for over 26 years. The focus we’re now going to put around it is one that will allow us to really serve all the propositions, products and experiences that we are developing around our other strategic drivers, which are magnetic value for customers, cost savings, and convenience.”
Tesco is not the first brand to open up its data to brands. Boots launched a similar proposition in September that makes use of the first-party data it collects from its 17 million Advantage Card loyalty members. The Boots Media Group is designed to help brands across a range of areas, including campaign planning, creative development and measurement.
NAM Implications:
- This level of shopping behaviour integration with targetable media…
- …has to pose a challenge to traditional media.
- A pointer for other retailers in terms of offering similar media packages?
